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Retail cropping up; residential and commercial activity good; medical community growing

Highland Colony Parkway now bustling business corridor

In the early 1950s, the H.C. Bailey family began assembling properties in pastureland considered far north of Jackson. When the Madison County Schools contacted company president Buster Bailey in the mid-1980s, the family property following Mississippi Highway 463 south to Old Agency Road didn’t seem so remote.

After Madison Central High School opened in 1991, a flurry of construction activity on the parkway began in earnest, including early tenant Diversified Technology Inc., an Ergon company that built on a wooded 28-acre site.

Today, Highland Colony Parkway is a bustling business corridor dotted with office and retail space, residential subdivisions and senior housing, a community college, banks, churches and schools. Medical facilities will soon take a stronghold. Baptist Health Systems is building an 88,000-square-foot, four-story ambulatory surgery center and diagnostic imaging center at the intersection of Highway 463 and Highland Colony Parkway.

“I’m mighty proud of it,” said Bailey. “The parkway is evolving to be better than I envisioned. I think it’s one of the nicest areas in the whole state and will get even better. We were fortunate that we had a lot of land to work with, and there had not been much development that messed things up in earlier years. I’m very pleased with its progress and excited about the future.”

Roughly two-thirds of the 10-mile parkway is located in Ridgeland; the remainder is in Madison. Entergy’s Energy Operations Headquarters is one of the parkway’s most prominent tenants.

“Even though it seems like it’s taking a long time to develop the parkway, I think you’ll see as much development in the next five years as has occurred all the way from inception to now,” said Bailey. “I think the pace will really pick up.”

According to Parkway Properties market data, Highland Colony Parkway remains the most desirable submarket in the metro Jackson area. In the second quarter of 2004, the vacancy rate for office space along the parkway was 4.18%, compared to the neighboring County Line/I-55 Corridor, which reported a 14.86% vacancy rate. With 37,317 square feet added to the market this year for a total of 822,503 square feet of Class “A” space along the parkway, the average rental rate remained constant — $17.25 per square foot.

Building activity continues at an explosive pace. Mark Nicholas, president of Nicholas Properties, LLC, helped lease 165,000 square feet of office space at Renaissance Place for roughly $15.95 per square foot. He is now pre-leasing space for two new buildings totaling 70,000 square feet in The Commons Business Park. “We should be ready by the end of the year, and will set our rates in the high teens,” he said.

All of the Bailey office buildings that have been completed are fully leased. Another one, a 25,000-square- foot building in Crescent, is nearly completed and 85% leased. Construction on a 75,000-square-foot building should start next month, with possibly as many as three or four more in the next couple of years, said Buster Bailey.

“I don’t know if we’ll start three or four buildings,” he said. “These things aren’t certain until they’re certain, you know.”

Bailey and Mattaice Properties are partnering on a high-end retail center, Old Agency Square, located at the intersection of Old Agency Road and Highland Colony Parkway. The destination retail development, which could surpass 500,000 square feet in two phases, will include a mix of national and local restaurants, specialty shops and perhaps one or two department store anchor tenants.

“We’re still lacking retail and ancillary businesses on the southern end of the parkway, but it’s coming,” said Nicholas. “A tremendous amount of retail is planned that will transform the corridor in the next two years.”

Commercial Realtor and developer Savita G. Nair of Cook Commercial Real Estate hopes that’s true. She is marketing 10 acres for development — for $5 a square foot — on land located across the parkway from Cypress Lake subdivision and Madison Central High School.

“I hope it’s about to take off and move further south,” she said. “Once Baptist is built out and the Mississippi Hospital Association building is too, and the group of doctors builds its facility by the lake, I think the movement will come south to us.”

Nair also has a parcel on “Bank Row,” a build-to-suit site she hopes will attract a bank or restaurant.

“Highland Colony Parkway is built along the lines of Gwinnett Parkway in Atlanta, which has professional office buildings, specialty retail and hotels,” she said. “With Nissan coming online and Madison being an upscale community, the parkway is a great location for technology-based businesses. In my mind, upscale and high-tech go together.”

The Township at Colony Park in Ridgeland is the only residential-commercial-retail development on the parkway, and its development company, Kerioth Corporation, has plans to begin construction on five buildings by year-end, said Kenneth Herring, corporate vice president of sales and marketing.

“Two buildings — one is 24,000 square feet, the other is 12,000 — have been through architectural approval and construction should begin in the next three or four weeks, as soon as bids come back,” he said. “We’re pre-leasing space for $18 a foot. The other three buildings, including retail, will range from 15,000 to 24,000 square feet. It’s all going good.”

At The Township, Herring said the company has closed on 27 of 135 single-family residential lots ranging from $53,000 to $69,000. “We’ve been seeing good demand,” he said. “On the flip side, a lot of people want to watch. They want to see what we come up with before buying in.”

Even though retail activity is increasing, the parkway needs more restaurants, said Herring.

“There’s really nowhere to eat right now,” he said. “That’s what we’re working on now.”

Mark S. Jordan, president of Mark S. Jordan Companies, owner of Dinsmor Commercial Park and One Paragon Centre, said even though he has enough land on which to build 10 more office buildings, the demand is not as strong as the market indicates.

“Mississippi is not growing commercially at any level that will create much demand for a lot of office buildings,” he said. “If we were to get a major corporate relocation here, it would be a different story. An outsider coming in wanting office space is a rare bird. The Highland Colony Parkway is cannibalizing other metro Jackson submarkets.”

The migration of business and retail to the parkway will continue, said Nicholas. “Within the next few years, we’ll probably triple business,” he said.

Dianne Dyar, executive director of the Madison County Chamber of Commerce, said growth along the parkway has been “phenomenal.”

“This corridor will experience unprecedented growth over the next few years to include retail and office space,” she said. “We see this growth as just the beginning of new opportunities for businesses to relocate and expand in Madison County.”

Contact MBJ contributing writer Lynne W. Jeter at mbj@thewritingdesk.com.

About Lynne W. Jeter

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